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A COMPARITIVE ANALYSIS OF MARKETING STRATERGIES FOLLOWED BY NIKE AND ADIDAS

TEAM MEMBERS

ANUPAMA VENU CLAES JOTORP DEEPAK TUSHIR GUSTAV TENERZ SAIRAM KRISHNAN SANJAY SHARMA SUNANDA SURESH

09014 09126 09032 09128 09088 09090 09112

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INDEX

1. INTRODUCTION 1.1. BRIEF ANALYSIS OF INDUSTRY 1.2. BRIEF DEFINITON OF INDUSTRY 1.2.1.TRENDS IN THE INDUSTRY 1.2.2.MARKET ANALYSIS 1.2.3.MAJOR PLAYERS AND MARKET SHARES 1.3. MAJOR FORCES SHAPING THE INDUSTRY 1.3.1.PORTER S FIVE FORCES 1.4. PREDICTION FOR 2009-2010 1.5. THE COMPANY AND MAJOR PRODUCT LINES 1.5.1.BRIEF HISTORY OF COMPANY 1.6. FLAGSHIP PRODUCTS, MAJOR PRODUCT LINES, RECENT FORAYS 1.7. HISTORY OF THE BRANDS 2. MARKETING STRATERGY 2.1. CUSTOMERS 2.2. COMPETITORS 2.3. COLLABORATORS 2.4. COMPANY 2.5. CONTEXT 2.5.1.TECHNOLOGY 2.5.2.SOCIO CULTURAL 2.5.3.ECONOMIC 3. SEGMENTATION, TARGETING, POSITIONING 3.1. MARKET SEGMENTATION 3.2. SEGMENTS TARGETED 3.3. POD S AND POP S 3.4. VALUE PROPOSITION 3.5. POSITIOING 3.6. EVOLUTION AS A BRAND 4. MARKETING MIX 4.1. PRODUCT 4.2. PLACE 4.3. PRICING 4.4. PROMOTION 5. ANALYSIS REPORT 5.1. CUSTOMER SURVEY 5.2. MARKETING STRATERGIES 5.3. PORTER S GENERIC STRATERGIES 5.4. CREATING VALUE 5.5. CAPTURING VALUE 5.6. SUSTAINING VALUE 6. REFERENCES 3

And lastly we ll state our conclusions on the comparative marketing strategies of these firms. We will compare their marketing strategies. Sportsmen. need quality gear. cater to. The world s athletes play using their products. dedication and perfection and hence sportsmen have always been respected. We will dissect their segmentation and examine their positioning on the global playing field. to be able to compete better. across borders. Let s see how they play the market. their innovative designs and technology creating waves. their targeting and their marketing mixes. Both these companies started off as footwear makers for the modern athlete. specific to their game. the subjects of our study. professional or amateur. religions and races. Our study will concent rate on the primary product these two firms make Athletic Footwear. with a worldwide presence.INTRODUCTION Brief Analysis of Industry Sport is an integral part of modern contemporary society. Today they are among the world s top corporations. But now these firms have diversified. accessories and equipment. Sport has always been associated with discipline. They compete on the broader platform of footwear. Welcome to NIKE versus ADIDAS 4 . It is this market that the two conglomerates. apparel.

Turkey and Russia. China is the biggest bet for the big guns. there has been an increase in the popularity of alternate footwear. translating into a per capita income of Rs 48. Both Nike and Adidas realised this early and invested heavily in advertising during the 2008 Beijing Olympics.25 per cent during 1951-2009. Now they have a greater incentive to move to South Asia as their market seems to be shifting here too. Brazil and Russia as huge untapped markets for their products. The opening up of these markets has provided respite to the industry and they are making good us e of it. Adidas. just being behind USA & China in footwear industry both production and consumption. Nike. for example. middle-income and high-income brackets. Brazil alone had a 30 pc increase in Q1 2009. thus resulting in a compounded annual per capita income growth rate of 9. at least momentarily with the emergence of China. we will observe that consumer 5 . India is ranked the 4th largest economy by GDP (in purchasing power parity term) and is expected to rank 3rd during 2010. Nike. At this stage. Why? China s huge m iddle class is rising and the country s ever increasing wealth serve as a classic ingredient for market ignition. saw its sales increase 50 pc in China in 2008 on a currency neutral basis and again a 50 pc increase in sales in Q1 2009.Brief definition of Industry Trends in the Industry The latest picture of the industry has not been as rosy as it has been earlier. to make use of the cheaper labour. similarly. MARKET ANALYSIS India has a large market for footwear and the brand loyalty is also growing. Adidas partnered the games and Nike. If we analyze the consumption pattern of 70 different economies and segment them into low-income. This inadvertently has resulted in decreasing margins and the quest for new markets and innovation to get the profits up again. India s GDP for footwear grew at the rate of 9.4% for the year 2008 -2009 the country s GDP stood at Rs 54 lakh crore. Already most of these firms use South Asia as their manufacturing base. in particular. had a 25 pc increase in sales in 2008 and another 30 pc in Q1 2009. the industry is experiencing hyper competition.450. with the big four. Of these. Reebok and Puma and the others such as Converse and New Balance. The worries seem to have ended. The reasons for this being that the demand for the products has been decreasing and at the same time. The Chinese marker saw huge residual sales after the Olympics. Turkey. as always focused on individual player and team endorsements.

Ranipet. The following table indicates concentration of units in various parts of the country: Region Tamil Nadu Delhi & up North Agra. beverages and clothing & footwear account for 47 per cent. who have outsourced their production to China are planning to outsource it to India. Jalandhar in Punjab. the sandals and chappals are produced in the household and cottage sector. India is the major source for supplying medium and low priced footwear and most of the manufacturers. . Ambur in Tamil Nadu. India ranks second among the footwear producing countries next to China. The major production centres India are Chennai. While leather shoes and uppers are concentrated in large scale units. India produces more of gents footwear while the world s major production is in ladies footwear.P. The industry is labour intensive and is concentrated in the small and cottage industry sectors. Nike and Puma. Kanpur Calcutta Bangalore Mumbai Others Large & Medium Scale 64 4 9 1 6 3 13 SSI 31 8 34 3 3 11 10 Household 7 25 14 19 4 32 6 . Some of the footwear industry who have turned to India are Adidas.spending on food. Agra and Delhi. 34 per cent and 22 per cent of their total consumer expenditures. India is standing on the threshold of a retail revolution and witnessing fast changing retail landscape. Kanpur in U. with footwear market is set to experience phenomenal growth. respectively . INDIAN FOOTWEAR INDUSTRY The Footwear Industry is a significant segment of the Leather Industry in India. . Mumbai in Maharastra.

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there is a threat of other manufacturers to expand their portfolio. might emerge strong competitors. All in all. essential to attract and retain the target consumer. there are able to control their costs and hence maintain a competitive advantage over new and emerging competitors. there is a huge potential for new entrants. Due to the enormous scale of operations of both Nike and Adidas. For example. Bargaining power of buyers High There are a huge number of buyers with respect to the number of brands in the industry. Also. Their brand images have a distinct competitive advantage. These. the buyers have a high amount of bargaining power. hence the importance of the brand image. the industry is a comparatively easy one for new manufacturers to enter. They also result in a huge loss of revenue. they have been included for s ake of easy reference. 8 .Major Forces shaping the Industry Porter s Five Forces Barriers to Entry Low The Barriers to entry to the athletic footwear industry are quite low. In addition to these. with already strong regional brand names. The new generation has vastly different tastes and purc hasing methods. made mostly in the far eastern countries. Many buyers in new markets are cost sensitive and switching cost is low for the buyer. Identity is the key to brand trust and loyalty. The buyers of sports footwear have changed in the past decade and there has been an increase in woman purchasing athletic footwear. Their powerful brand identities give them an au ra which is difficult for a new entrant to pervade through and beat. They must establish a strong brand identity. Though selling top quality footwear for athletes is a highly competitive field. there is also the loss from copies of their premium footwear. Therefore these companies are in a constant struggle to differentiate their brand and use other innovative means to market them differently and successfully. Though they do not strictly come under this category. in India Bata launched its Power brand of running and athletic shoes which are still going strong. Even with all these factors coming into play.

bargaining power of suppliers is negligible. He cannot play with boots or his bare feet. In this situation. The suppliers are usually dependent on these firms as a means of survival. more identity due to endorsements by top sporting personalities and by aggressive marketing and sales strategies. But for a professional athlete. Cotton. namely. This gives them enormous power over their suppliers. Ad idas and others in this field such as Puma and Reebok have grown tremendously in the last decade and each of them have been offering more choice. The conglomerates hold sway over the suppliers as they have mostly standardised their input procedures and hence can easily switch between substitutes. The industry is in hypercompetition and the rivalry is extremely fierce. Rivalry among existing Competitors High The rivalry among existing competitors is very high in this industry. Nike.Bargaining Power of Suppliers Low Bargaining power of suppliers to this industry is virtually non-existent. the threat of substitutes is very low. There are a large number of suppliers in the market and the materials needed for this industry. A consumer is not likely to switch and so. There may be substitutes for a fashion item. substitutes for his shoes do not exist. Threat of Substitutes Low There are no real substitutes for athletic footwear. He cannot switch mainly due to his performance specificati ons but he has little alternative to switch as well. 9 . Rubber and Leather are commodities readily available in the open market.

Prediction for 2009 10 10 .

After the death of Horst Dassler. the brothers split up and Rudolf Dassler went on to form his own company. Adidas sees India as a huge growth market and according to Gellner. a image it spends a fortune to uphold. Adidas India launched the advantage adidas campaign. keeping in mind the price conscious Indian consumer. Adolf s son. In 2005 Adidas acquired British giant Reebok to further strengthen its market and customer base. Adidas will invest huge sums to take on its competitors here. they roped in Sachin Tendulkar as their brand ambassador which proved a sound business decision. whose name formed the company s title. He was joined in 1924 by his brother Rudolf Dassler and using t heir mother s laundry as their manufacturing base. In 2005. the company went through some troubled times. A long line of innovative products and successes later. Adolf Dassler was born in Bavaria and started making sports shoes in his mother s kitchen after he returned from World War 1. After the Second World War. Famously. they began operations. though. Andreas Gellner took over as Managing Director for Adidas India.The Company and Major Product Lines Brief History of Company Adidas Adidas was formally registered on 18 August 1949 as Adidas AG. In 2001 Herbert Hainer took over as CEO of Adidas and has been leading the conglomerate ever since. it formally began operations only in 1996 with the establishme nt of Adidas India Marketing Private Limited. by Adolf Adi Dassler. In 1998 Adidas pulled a masterstroke. In 1999. It was then bought by French industrialist Bernard Tapie and subsequently by Robert Louis-Dreyfus. Adi Dassler drove to Munich and persuaded Olympic gold medallist Jesse Owens to wear his shoes which established his reputation among the sporting world and gave him lots of contracts and financial success. In 2004. The trademark three stripes and the slogan Impossible is Nothing are Adidas identity. Adidas launch ed its cheapest ever shoes in India. which increased sales by 30%. Adidas is one of the world s largest corporate. Indian Operations Though Adidas entered into a license agreement with Bata in 1989. during the 1936 Olympics. with a product line to envy and worth millions of dollars. 11 . which later became Puma.

Though Nike has entered the market in earnest very late. Bowerman. Knight and Bowerman began to make their own shoes under the brand name of Nike. who had earlier designed shoes for his athletes. which became worldwide bestsellers and launched the business. with market shares exceeding the other major players by significant margins. instead of renewing its franch ise.1 will stop at nothing to gain lost momentum in the Indian subcontinent. named after the Greek goddess of victory and bearing the Nike swoosh. He travelled to Japan and entered into an agreement with the Onitsuka Tiger company and became their sole distributor in the US. 12 . joined hands with Tiger to make the famous Tiger Cortez shoes. Today Nike is the world leader in athletic footwear. the world no. Philip Knight went on to study at Stanford where he published a paper on ending the German domination in the athletic footwear industry. Bowerman was Knight s track and field coach at the University of Oregon.Nike Bill Bowerman and Philip Knight started the company we know today as Nike in 1962. which is one of the company s biggest strengths today. The Swoosh and Just Do It slogan are huge brand identities. Bowerman and Knight received their first shipment of 200 shoes and sold them at local meets to make a good profit. Nike is a truly global player and seen as a model for innovation driven growth. Blue Ribbon Sports parted ways with Onitsuka Tiger and became Nike Inc. worth Rs 200 Crores. In 1971. In 1972. Nike then launched its special range of cricket shoes and sponsored the Indian football team as well. In 2004. Indian Operations Nike has been present in India for over a decade through its seven year license agreement with Sierra enterprises. it became a subsidiary and started operating with more freedom and capital. It was originally known as Blue Ribbon Sports. culminating in its bagging of the Indian cricket team s jersey rights. The result was that the market share rose and Nike became a force to contend with in the Indian market. Probably the biggest sign of the change in guard was the heavy investment in Cricket by Nike. which didn t help much in the bigger scheme of things as Reebok and Adidas came to the country with fully owned subsidiaries. This explains why the global market leader is still lagging behind in India.

customers can easily link Adidas image with not only strength. But besides that. In keeping with the brand image is its association with the distinctive logo and its advertising slogan. outdoor and internet. from both strong-willed hero worship and water-like fork environment. It may become a good chance for Adidas because it can take advantage of its previous advertising way of Impossible is Nothing campaign by sponsoring sports stars to express the corporate philosophy of grit. giving people more courage and psychological comfort in face of economic crisis. determination.EXECUTIVE SUMMARY Adidas Inc. Adidas will react to the consumers pessimistic attitude and stressful emotion during this period. passion and humor. which can provide caring emotional communication. we also focus more about family function especially in Asian countries which emphasize a lot on family. has evolved into a large multinational enterprise." In order to maintain and sustain this image. The preferred media we choose are TV. is a marketer of sports apparel and athletic shoes. the company makes huge investments in advertising and brand promotion. At the critical time of global economic crisis. The German manufacturer. through its marketing strategy which rests on a favorable brand image. "Impossible is Nothing. 13 . Therefore. but also warmth. specific magazines.

When it came down to it Adidas and the NBA came up with the slogan called Basketball is a Brotherhood. The way these six players were selected was by their athletic ability which is why they are also known as all stars. For over 80 years. Tim Duncan of The San Antonio Spurs. Adidas has been part of the world of sports on every level. While Dassler was in his mother s wash room he decided to begin an athletic shoe. The main focus of The Brotherhood was Adidas to sponsor the NBA. Chauncey Billups of the Detroit Pistons and Gilbert Arenas of the Washington Wizards.1 INTRODUCTION Adidas was formed by German sports apparel by the founder Adi Dassler during the 1920 s. Recently Adidas and the NBA joined forces and made The Brotherhood . Then these six players decided to form a series that would help kids to discover their dream by playing with NBA Stars. but also in the sporting goods industry. (www. After he made the shoe he had help from his brother and twelve other people to produce around 50 handmade shoes per day. delivering state-ofthe-art sports footwear. Dwyane Wade of The Miami Heat. 14 .oddballshoe. These athletic shoes were made for running and training. Adidas is a global leader not only in the shoe industry. A strong advertising and public Relation events makes adidas as a worldwide recognized brand and it would be more sustainable in the world market. Today. The Brotherhood consists of Tracy McGRady of The Houston Rockets.com). Shoes from the Adidas are available in virtually every country of the world. Oddball is proud to carry quality large size Adidas. apparel and accessories.1.

The three-stripe logo was designed in 1941 by Adi Dassler and he registered it as a trademark for Adidas after the split. especially the Olympics.Golf balls.Snowboard apparel. s is snowboards snowblades s i boots and bindings inline s ates hiking.Winter sports incl. climbing e uipment. apparel. Germany . The most important marketing breakthrough was the active promotion of global sporting events. Cliché Skateboard e uipment. Adi Dassler registered more than seven hundred patents. e Activities of the company and its subsidiaries are directed from AdidasSalomon AG's headquarters in Herzogenaurach. Adidas began selling its shoes in the United States after 1968 and in few years the company dominated the American market. The strength of Adidas was its product innovation. Taylor Made-Adidas Golf . 15 6 0 67 B A 6 @ 9 654 3211 B 6 6 B A 0 6 A 8 . In the same period. Activities: manufacture and distribution of textiles. Between 1988 and 1992 Adidas total sales dropped from nearly $2 billion to $1. Adidas has 107 subsidiaries in 20 countries. Maxfli . e appare and hardware Produ ts: Adidas .F s ch as bags and balls Salo on . In 1990. and exports to 160 countries.7 billion.Golf e uipment.S. Bonfire . shoes and appliances for sport and related products. Exploitation of the registered trademark ³Adidas´ is made wher ever it is an opportunity. market. irons and accessories. golf shoes and finally. After the split Adolf (Adi) Dassler founded Adidas and his brother Rudolph founded Puma. every official wore Adidas. golf apparel. Arc'Teryx . At the 1972 Olympic game in Munich. Adolf Dassler designed a pair of sport shoes in 1925 and few years later he and his brother Rudolph were selling special shoes for tennis playe and began rs design specific shoes for different sports.1 2 HISTORY OF A IDAS The company Adidas was founded in the early 1920s as Gebruder Dassler Schuhfabrik in Herzogenaurach in Germany. Adidas was holding on to just a two to three percent share of the U. Mavi -Cycle components. The connection of Adidas to the Olympics has a rich heritage. The family company split in 1948. footwear and apparel.Outdoor apparel.

since the late 1980s. 2. and they had a long supply chain . The company revenue for 2008 was listed at 10. often in English. The European market shares dropped while Nike s shares grew. FWB: ADS) is a German sports apparel manufacturer and part of the Adidas Group. Traditionally. or about US$15. The company's clothing and shoe designs typically feature three parallel bars.4 billion.799 billion and the 2007 figure was listed at 10. to its US rival Nike. From being the U. With its Impossible is Nothing campaign and strong product.6 billion. during the Adidas recession. the company have their own factories and wholly owned subsidiaries.2 billion to more than $3. Therefore.2 billion in the ten years between 1988 and 1998. Adidas s market share dropped to 3 percent in 1992. market leader in the late 1970s. Nike was able to increase its share of the domestic sport-shoe business from 18 percent to 43 percent.Nike s sales went from $1. the company also produces other products such as bags. the Adidas brand has become so strong as to place it in the rarified air of recession-proof consumer branded giants. The market demand from teenagers who should be Adidas and most important target market increased very fast and Adidas started to expand its targeting market to younger consumers because of its severe competition with Nike and Reebok. SITUATION ANALYSIS Adidas AG (pronounced [AH-dee-'dahs]. style and reliability. and Rockport. Adidas has worked to transform itself from a brand of sneakers to a product integral to the sports culture. 16 . command higher prices and generate more revenue than its competitors. Gillette and Proctor & Gamble. 2. was that Adidas was unable to ship products when it was needed. A strong brand allows its owner to expand market share. shirts. and other sports and clothing related goods.299 billion. Besides sports footwear. During this stage. Taylor Made-adidas golf company.it took 18 months to get a new shoe into the market. which consists of Reebok sportswear company. Adidas also have had problems with the upstream value activities in their value chain.S. in the company of Coca-Cola. The company is the largest sportswear manufacturer in Europe and the second biggest sportswear manufacturer in the world.1 Market Trend Analysis Adidas earn from EU 877 million in worldwide sales to EU 9. Consumers are willing to pay more for brands that they judge to be superior in quality. The situation analysis consists of the market trend analysis and competitor analysis. and the same motif is incorporated into Adidas's current official logo. What happened in the '70s and forward.

SOWT Analysis: A SWOT analysis comprise of strength. Figure: Adidas expence to advertising (billion Euro). Highest brand image in India according to our survey. Sponsors football teams with maximum fan following in India and USA.org) STRENGTHS Largest International portfolio of sport ambassadors.2 Competitor Analysis Adidas has two lager competitors Nike and Rebook.Chart-1: Adidas Net Sales data in Euro (million) 2002-06 (Source-www.com 2. A SWOT analysis would be helpful to understand the competitive environment. Opportunity and Threats.adidas. (Source-www. 17 . Besides that it would have several small competitors. Weakness.wekipedia. This four trends are analyze below.

is basically how the customer perceive the brands quality status. partly because it influences brand associations in many contexts and partly because it has been empirically shown to affect profitability as measured by ROI (Return On Investment) and stock return. People like the familiar and are prepared to ascribe all sorts of good attitudes to the items that are familiar to them. and brand loyalty. Brand awareness is the base to affect the consumer perception and even taste. Brand associations can be 18 . This asset can be created and analysed trough the four dimensions. Our survey shows Nike behind Reebok & Adidas in market share in India. The newly born several brands like CAT. Increasing demand on the sportswear. Brand Equity Brand Awareness Perceived Quality Brand Associations Brand Loyalty Brand equity can be defined as the brand assets linked to a brand s name and symbol that add to a product or service.WEAKNESSES Rigid pricing structure. See figure below. brand associations. THREATS y y y Adidas larger competitor Nike has a grater market share and having a big budget in marketing activity. OPPORTUNITIES y y y Has a great opportunity to expand international market. Aaker perceived quality is a special type of association. Has not do well in Indian subcontinent market. GAP has increase their advertising budget in recent years.3 Comparative Analysis Trough The Equity Model Review of the equity model Let s make a short review to remind the reader what the separate blocks or keywords mean in the equity model. According to D. Positive and increasing market trends can increase through the effective advertising. Perceive quality. brand awareness. perceived quality. Amount of competitors increasing day by day. 2.

product attribute. Jordan and T. advertising. and then abroad. national teams and big sport events like the Olympic Games and dif erent World Championship f events. Adidas took up the competition with Nike through raising their advertising budget to a level that made it possible to compete with Nike on the same conditions and the same strength as Nike did to capture the consumer interest. this event started out 25 20 15 10 5 0 Nike adidas Reebok Power Puma 7. This will help them to create awareness with help from different types of media. but real drivers were huge oversized billboards and murals on buildi gs n that blanketed cities with messages featuring key Nike-sponsored athletes. The company communicate their heritage of innovation. Nike was the first company to establish flagship stores and it turned out to be a sensation.53 Others . Nike own and sub-branding. Nike s advertising strategy was to create dominant presence in media. Nike Town shops in bigger city s. and sub-brands. creating a dominant media presence. sports associations. The concept is to strengthen the size and intensity of each loyalty segment Comparative anal sis Nike centred their brand e uity model on the platforms. brand associations. use situations. About the second strategy.g.anythin that connects the custo e r to the brand It can include user i aginary. development of Flagship stores. The success was obvious and after hard work and striving toward a top position in the industry Adidas was back in business. Examples of that is the Adidas Streetball Challenge a local threeperson team basketball tournament.35 19 E D I Q R E P R D F H G P R C P R 13. Mohammad Ali. Adidas tried to spread meanings like We know then we know now and There is nothing between you and success.24 25. Adidas choice was to e periment with sport events. technology and big success stories with personalities like Emil Zatopek. first national. and symbols Brand loyalty is at the hart of any brand s value. Woods and their success stories. TV ads linking Nike to a city were used. so e ceed your own e pectations and limitations and Earn it . They made TV and other advertising campaigns. In contrast Nike has their focus on individuals like M. not products. advertising. and teams.65 2.29 22. Adidas did not just spend more money they made an impact with brilliant e ecutions. 30 28. organizational associations. endorsement focus strategy. The Adidas strategies were based on. Nike created media presence in several trend setting United States cities.94 Nike s third strategy was to develop. What differs is that Adidas focuses on sponsorship of teams and events e. To create brand awareness both companies have been using endorsement strategies in their brandbuilding programs. flag ship stores. sponsorship programs focusing on major global events. with which they made great success. the endorsement focus strategy.

adidas. For Adidas one image study of consumers found the brand very trendy. it still meant participation. All marketing actions that both companies are implementing will hopefully result in loyal customers. Adidas made hereby a brand-building success. Adidas advanced from $1. ADVERTISING METHOD & MEDIA SELECTION The media that was used of The Brother Hood will be television. The low end products. for the normal consumer still have a high technology and level of innovation because of their inheritance of the older innovations and technology from the Equipment line. magazines and Internet. The Equipment subbrand would represent the best. based on the same idea. modern and cool. As S as a trail in Berlin in the beginning Ch rt-03: Adidas market Share comparison (Source-www. the Alpha line. In the finals in Germany it attracted 3200 players and 40. Besides that a huge amount of data about Adidas advertising related activities. The Nike customer associated the Nike brand with words like sports. This strategy made the Adidas brand take on a different meaning. 7 billion in 1992 to $4.of the 1990s as one time occasion. In the mid 1990s it had become a huge sport event with about 500. whatever the product was.9 billion in 2002. Reasons for that is one can relate to or identify one self to Nike s marketing campaigns like Just do it and the companies front athletes like Michael Jordan and Tiger Woods. emotion and performance.1 Core Advertising Consideration The core advertising factors of Adidas are as follows. attitudes and life style.com) 20 . 3. it seems that both Nike and Adidas companies have succeeded to create a brand loyal customer who perceives the Nike and Adidas products as top quality. The survey was made in late 1990s. 3. Adidas introduced a subbrand in 1990 to serve the high-end products for all categories of shoes and apparel.000 spectators. According to sales figures for the both companies. This was a success strategy for Adidas so successful that Nike copied their idea and introduced their own line.8 billion in 1998. Nike advanced from $1 billion dollars in 1986 to $ 9.000 participants all over the bigger cities in Europe.

You need to know who are going to be interested in the product.1. NBA website (www.2 Advertising unit: When it came to the advertising unit for television Adidas only runs: 30 seconds ads since most of these ads are played during NBA games. When it came to the Internet ads are a top banner.4 Target Audience: When it came to any product the audience is very important. The media vehicles that were going to be used for magazines were Sports Illustrated and ESPN Magazine.1.3 Seasonality: Since The Brotherhood is made up of The NBA the seasonality will be during the fourth quarter.1. TNT basketball games. The reason for this is that the basketball season begins in October which is in the fourth quarter.nba.cnn. For example. For example.1 Media Vehicles: The media vehicles that were used for television will be ABC basketball games. When it came down to this The Brotherhood is mostly for boys ages 820 and for older males. 3. on page four you will see TMAC jersey for boys 8-20 and older males.1.com).com).shopadidas.espn. 3. When it comes to the Internet The Brotherhood is advertise daily and at all times. Sports Illustrated website (sportsillustrated. 3.com). As you see below the picture on the third page that says Adidas NBA Shop.5 Advertising Media Consideration The reason that this media was selected was because television. 3.a multinational company Adidas have separate advertising strategy in different area of the world.com).1. magazines and Internet were the best way in which Adidas were able to show there customers their products. 21 . The media vehicles that are use for Internet were ESPN website (www. Adidas website (www. The time of day in which The Brotherhood would be run on television is during the evening while the NBA is holding their regular games. on page five you will see the ad which it a top banner.go. in order for Adidas to promote the The Brotherhood they had to come up with a slogan in which they called it NBA is a Brotherhood. The ads in magazines are full page. ESPN basketball games and ESPN 2 basketball games and ESPN s Sports Center. 3.

and the bac s of event tic ets and supermar et receipts. magazines. printed flyers and rac cards. bus stop benches. mobile telephone screens. stic ers on apples in supermar ets. musical stage shows. This advertising research methodology measures shifts in target market perceptions about the brand and product or service. elastic bands on disposable diapers. and the quality of the advertising executions or creative. banners attached to or sides of airplanes ("logo-jets" . town criers. 3. human billboards. web banners. Different advertising media use in the in the market like commercial advertisement. web pop-ups. sides of buses. covert advertising. Adidas use several advertising media to promote their product in the marketplace. posters.2.Besides Adidas have several technique in media selection which have discussed in the following sections. the effectiveness of the media buy or targeting. Any place an "identified" sponsor pays to deliver their message through a medium is advertising. the opening section of streaming audio and video. taxicab doors.2 Advertising Media Commercial advertising media can include wall paintings. These shifts in perception are plotted against the consumers levels of exposure to the company s advertisements and promotions. billboards. One way to measure advertising effectiveness is known as Ad Tracking. subway platforms and trains. Public transport advertisement. Online advertisement. The purpose of Ad Tracking is generally to provide a measure of the combined effect of the media weight or spending level.1 Covert advertising 22 . street furniture components. roof mounts and passenger screens. newspapers. inflight advertisements on seatbac tray tables or overhead storage bins. cinema and television adverts. Print media advertisement. radio. Celebrities advertisement. shopping cart handles (grabertising . Infomercials. 3. shopping carts. e-mail etc. s ywriting.

The main objective in an infomercial is to create an impulse purchase. Robot and Spaceballs also showcase futuristic cars with the Audi and Mercedes-Benz logos clearly displayed on the front of the vehicles. For example. or his watch engraved with the Bulgari logo. Another example of advertising in film is in I. where Tom Cruise's character John Anderton owns a phone with the Nokia logo clearly written in the top corner. The majorities of television commercials feature a song or jingle that listeners soon relate to the product. Adidas also use this advertising technique. 3. Short form infomercials are 30 seconds to 2 minutes long.Covert advertising is when a product or brand is embedded in entertainment and media. Long form infomercials have a time length of 30 minutes.2 Television commercials The TV commercial is generally considered the most effective mass-market advertising format. Virtual advertisements may be inserted into regular television programming through computer graphics. described as long form and short form. and often demonstrate products and their features. as is reflected by the high prices TV networks charge for commercial airtime during popular TV events. the main character can use an item or other of a definite brand. CNN etc. Adidas arrange several infomercials in the sports based program. Robot. I. Infomercials describe.2." because the film is set far in the future.2. 23 . and commonly have testimonials from consumers and industry professionals. Infomercials are also nown as direct response television (DRTV commercials or direct response mar eting. as in the movie Minority Report. display. Adidas has a large amount of TV commercial advertisements in the worldwide TV network like BBC. 3. so that the consumer sees the presentation and then immediately buys the product through the advertised toll-free telephone number or website. It is typically inserted into otherwise blank backdrops or used to replace local billboards that are not relevant to the remote broadcast audience. where main character played by Will Smith mentions his Converse shoes several times. calling them "classics.3 Infomercials There are two types of infomercials. in a film.

3.2.4 Celebrities
This type of advertising focuses upon using celebrity power, fame, money, popularity to gain recognition for their products and promote specific stores or products. Advertisers often advertise their products, for example, when celebrities share their favorite products or wear clothes by specific brands or designers. Celebrities are often involved in advertising campaigns such as television or print adverts to advertise specific or general products. Adidas use David Bekham as their brand ambassador and many more celebrities in every region to promote their product.

3.3 Advertising approaches
The positive impact on the mar et of the adidas Originals communication approach ma es adidas Originals continue their successful new creative mar eting tonality. The Fall/Winter 2005 campaign is, as the one from Spring/Summer 2005, photographed by Karl Lagerfeld and underlines adidas Originals¶ lifestyle relevance. To Celebrate Originality, and in a playful opposing manner to last season, adidas has switched from the blac and white SS05 executions, highlighted only by the iconic blue Trefoil, to bright and energetic colours in FW05 ads; an engaging creative idea supervised by adidas Global Creative Director Michael Michals y and Visionaire¶s Stephen Gan. The shooting too place at Karl Lagerfeld¶s studio in Paris. The frame of the ads shows humour and translates the freshness of the ³High Energy High Style´ concept. The result is a new advertising campaign that clearly communicates adidas Originals¶ street relevancy. Adidas Originals contemporary street wear collections are inspired by the brand¶s historical anecdotes. The Fall/Winter 2005 ads will brea globally in July 2005 issues of ey lifestyle and fashion publications such as Kult, Pulp and Blac boo as well as magazines such as Arena Home Plus and Teen Vogue. All adidas Originals mar eting communication efforts will evolve around three pillars in 2005: to energize, globalize and contemporize adidas Originals.

CONCLUSION
Both Adidas and Nike have used the same theoretical systems to create their brand building programs. The companies are benchmarking each other, using the techniques from each others successes, when Nike launched their subbrand product Alpha line which was benchmarked on Adidas already launched subbrand of the Equipment product line for the elite of sports men. We can find many similarities like endorsements strategies and the companies advertising strategies. What differs in the endorsement strategies is that Adidas focuses in sponsoring teams and global events, while Nike have their center of attention on stars in specific sport like basketball and Michael Jordan or in golf and Tiger Woods. About advertising do both companies have about the same scale and scoop of advertising but they try to communicate different messages. These messages from Adidas is; the only one you compete 24

with is yourself whereas Nike communicate a provocative, aggressive winner attitude which can be related the American sports attitude You don t win silver, you lose gold . As we can understand the two companies are aiming at nearly the same targeted customer group but with a slightly differentiation of attitude. Adidas stand for a competing and winning over your self-attitude, and Nike stands for a winning over everyone attitude. We in the group think this differentiation is based on the differences in culture between the two companies and between Europe and USA.

As an overall reflection one can see that Adidas had to overcome, that the both companies had the same target group. Adidas choose a brand-building strategy that built on the same theoretical criteria s as Nike. But they created a differentiation in identity of the brand (see comparing analysis in the Kapferer Prism Model above) compared to Nike.

Adidas had the same strategy within creating equity value to their brand. They challenged Nike in endorsement strategy, and in advertising, but with a slight difference in communicated message, by doing it trough the same medias. To differentiate them self and make totall own awareness y activities, events like Adidas Streetball Challenge was created. Events like those communicated the Adidas brand around the world.

According to the results and positions the brand-building programs have given both Adidas and Nike in the sport industry, one can say that branding have been a totally determining factor. On top of that they made it so good that they are used as models in higher education.

Flagship Products, Major Product Lines and Recent Forays
Adidas
Adidas manufactures running shoes under its adiStar and Supernova brands, which include the adistar Ride, the adiStar Control 5, the Supernova Sequence and the Supernova Glide. The famous Copa Mundial football boot is Adidas s premier football boot, which later developed into the Predator range. For basketball, Adidas is most famous for its Superstar and Pro Model shoes. Beside these Adidas makes jerseys for national and domestic cricket, football, rugby, and tennis and lacrosse players with a separate line for gymnasts.

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Adidas has recently entered the sports lifestyle market, following on the heels of Puma and Reebok and has launched watches, eyewear and most recently, deodorants, aftershaves, perfumes and lotions.

COPA MUNDIAL

Nike
Nike s first products were track running shoes which came under the name Nike Air Max, followed recently by the Nike 6.0, Nike Nyx and the Nike SB skateboarding shoes. Recently, Nike launched special cricket shoes for bowlers and batsmen called the Nike Air Zoom Yorker and the Air Zoom Opener. But its bestselling line still remains the legendary Air Jordan basketball shoes, named after Michael Jordan. Air Jordan still contributes more than 30% of Nike s shoe sales. Like Adidas, Nike too entered the sports apparel and equipm ent market and makes jerseys and specialist apparel for various sports. Recently Nike teamed up with Apple to launch the Nike+ range, which can monitor a runner s performance through a radio device linked to Apple s ipod.

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it reiterates Nike s commitment to technology. Nike is using Flywire (A thread developed by Nike. its focus was to produce shoes crafted specifically for soccer and running. 27 . which is the company s corporate logo. Adidas also has a trefoil sign that it uses only on heritage products since 1972. When Adidas entered the marketplace some 50 years ago. Advertised using the slogan Actually. Called the Lunar Glide. SOLE COLLECTOR History of the Brands Adidas The company s clothing and shoe logo bear the trademark three stripes.But Nike s most recent product is the one making waves across the sports world. it is Rocket Science . The three stripes logo represents performance and the future of the Adidas Branding identity. It has become synonymous with Adidas and its dedication to producing high quality athletic product s to make athletes perform better. composed of Vectran. a liquid crystal polymer) and Lunarlite Foam to make the world s lightest shoes.

Recently dubbed "Captain of England. products have been repositioned in higher -end and sports specialty stores. of always pushing yourself further. but also for its product line. However.7 billion. Eclectic. Reinvention was the key. individual. Adidas generates close to 60 new foot -friendly designs each year. as well as active sponsorship of major global sporting events like the World Cup. 28 . ClimaCool TM. inline skating and surfing have grown into significant categories. How did it go about repositioning to once again be among the coolest of kicks? Adidas claims that. In 2004 Impossible is nothing became the central message of a global campaign that Adidas launched.5M spectators and o ne billion TV viewers worldwide. British football star David Beckham s relationship with Adidas has no doubt lent itself well to the brand s visibility in the UK. not only for the Adidas s marketing strategy. It refers to the shared attitude with the athletes. In September. and positioned its third division as Adidas Sports Style ." Historically. inspiration. exposure like this reflects in the numbers. hiking and mountain biking. With Europe as Adidas s largest market. honesty and commitment are derived from sport. The new technology added breathable materials to the shoe. Adidas. last year. In July. To keep up with the competition. Adidas & designer Stella McCartney announced their partnership. this sensibility was demonstrated through early and continued involvement with Olympic athletes. to beat the limits. 'no -rules' sports such as snowboarding. the brand has steadily regained market share over the past five years to become the world's number two athletic shoe company (behind Nike). resulting in a product with superior fit and performance capabilities. which were seen as lifestyle and leisure activities. introducing the Adidas by Stella McCartney collection. the Group completed its three-divisional structure for its sore brand. are now part of mainstream sports. "the brand values of the company authenticity. Increased product offerings in these categories have undoubtedly contributed to a better score for the brand. Tactics have been revised in getting these products out for consumption. The Adidas credo is to regard shoes as feet. sales grew seven percent to US$ 2. In 2002 Adidas footwear innovation. the key to revitalized success seems to lie in the considerable endorsement deals Adidas has developed with world class athletes.The new millennium has since brought about an Adidas renaissance. where revenue rose by 15 percent to US$ 878M last year. made its debut. Adidas s rapid growth in Asia." Beckham led his team to victory in the 2000 FIFA World Cup. Activities such as golf. Recent sports figures representing Adidas don t only score high marks in their game they also score high in their celebrity quotient. may be further propelled in Japan and Korea when those two nations host the World Cup this year an event which is expected to garner 2. As a result.

athletes.S. Adidas. The Nike story begins with the meeting of its co-founders at the University of Oregon. which is a part of Nike s brand image and corporate culture. It expresses a high ambition and a will for victory. It was only 36 years ago that we had a world with out Nike. the company grew. Bill Bowerman.On January 2006. The swoosh logo was developed by Carolyn Davidson in 1971. The company went from strength to strength. marketed by the then main player. the new Group will benefit from a more competitive worldwide platform. but after heated disagreements between BRS and Onitsuka. Together with the Just Do It slogan. In 1965. and decided to call their new com pany Blue Ribbon Sports (BRS). Even at a very early stage it seemed that Knight had a far-reaching goal. to the number one mass-market leader. It was here that middledistance-running business student Phil Knight fell under the tutelage of the college athletics coach. it continues to strike savvy deals that capitalize on the star power of young athletes and increase its visibility in the marketplace. events and leagues. after a period of selling Onitsuka shoes from the back of their van at athletic meets. BRS was basically the American distributor of Onitsuka training shoes. the Swoosh logo perfectly expresses the brand and its philosophy. legend has it that Knight and Bowerman each put in $550 to cement their partnership. to break the longestablished brand nomination of the U. By combining two of the most respected and well-known brands in the worldwide sporting goods industry. In order to achieve this aim. Nike Nike positions itself as the market leader of sports footwear and uses the greatest athletes and the record of their achievements in advertising. It appears that team Adidas has honed its strategy to become a revitalized contender in today s competitive sporting goods market and is now duly recognized as the sneaker of yesterday and today. well-defined and complementary brand identities. With the recent acquisition of a lifetime partnership with Orlando Magic's Tracy McGrady (basketball) and its heavy involvement with 2002 World Cup. Adidas continues to prove itself as a brand built to last through a game plan of reinvention. Adidas announced the acquisition of Reebok LTD. a wider range of products. and a stronger presence across teams. Nike would go on to grow out of the fusion of Bawerman's sporting innovation and Knight's marketing know -how. the new boss at BRS decided to split from Tiger in 1971 and create their own 29 . and in that period Nike has gone from the brash newcomer.

Davidson supplied Knight with a few designs one of which was the initial 'Swoosh' so well known today. It was in this year that it managed to persuade the then little known Chicago Bulls basketball rookie Michael Jordan to endorse his own range of shoes. and regained the top spot in terms of market sales . In 2008. came up with a continuous stream of developments and inventions of technical wizardry. Nike entered the cricket market with a 5-year sponsorship of the Indian cricket team for US$43m. It is said that Jeff Johnson came with the idea for the new name. For a while in the late 1980's Reebok actually overtook Nike to become the number one pl ayer (at least in terms of sales). Nike introduced shoes featuring new Flywire and Lunarlite Foam materi als. deciding t o honour the Greek goddess of victory. Flywire is a new technology made up of thin wires of vectran fibers. Nike and Apple released the Nike+iPod sports kit. enabling runners to log and monitor their runs via iTunes and the Nike+ website. which are 5 times stronger than steel and never lose strength. However it was in 198 5 that Nike really became a major player. It was after the introduction of the Jordan shoes and mass -marketing that went with them that the "trainer wars" got underway. Knight wanted a design that would represent movement. desperate to stay one step ahead of the competition. and another of the legends that the company managed to create for itself was developed. and thus Nike was born. the story doesn't end there. but Nike came back strongly with its 'just do it' slogan in 1988. Nike took off virtually instantly in the United States. the newly created Nike Company was ready to hit the market with its shoes. Lunar Foam is a material developed by NASA that gives the shoe excellent shock absorption and a great feel with minimal weight. but with deadlines to meet the Swoosh was chosen Even though Davidson was initially paid only $35 for her design. Each of the brands. Back in 1971. and within a year company sales were at almost 2 million pairs. Even Nike could not have imagined the effect that this single act would have on sales.K. Phil Knight turned to an associate from his teaching life and commissioned graphic -design student Carolyn Davison to work with his new brand. In 2006.company manufacturing their own shoes.a position they retain to the present day. Knight was not particular enamoured with any of these designs. It was also at this that the fledgling company had to decide on a logo for the brand. becoming the company's first wholly owned foreign distributorship. The new Jordan endorsed range transported Nike and trainers in general to a completely new lever of popularity. In 1981 Nike decided to take another major step. 30 . and a logo to represent the brand was urgently needed. with the U.

Beijing's the doorway into a vast new market. But this age barrier seems to be falling now. Nike's 36 percent worldwide market share dwarfs the 21. this year's games are a bigger deal for adidas especially. Men women and even children are well versed with the brands and use them. the Beijing games are a brawl for 21st century dominance of the sneaker world. most of them without sneakers. if any. within a few years. Also. MARKETING STRATEGY CUSTOMERS Both nike and adidas are a well known and accepted brands. For Nike and Adidas. mostly in the age group of 15 -35. and also an envelope. staying focused under Phil Knight's guidance. The Consumers are typically professional athletes. which contributes about 6 percent to its parent's total. Nike has expanded its global lead over its rival over the past three years. Nike has continuously pushed back the boundaries of trainer design. Adidas has been consistently dragged down by the once -mighty Reebok brand." for both nike and adidas. More children in the 12+ age category are identifying with these brands mainly due to their addiction to European Football which has gained a huge fan following. the consumers are brand conscious adults and girls.S. according to Sporting Goods Intelligence. amateur sportsmen and young people who identify with sport as a lifestyle. The strategies adopted by Adidas have been successfully implemented in several areas. after the U.6 billion feet in China. Knight took Davidson out for lunch and presented her with a diamond -encrusted Nike ring. Children from the age of 15 to adults of the age group 35 use both nike and adidas shoes. The envelope contained Nike Stock. Despite the relative strength of Germany-based Adidas in Europe and weakness in Nike's flagship U. Both the rivals are looking forward for the Olympics 2010. OUR ANALYSIS (According to customer survey) The customer analysis for both Nike and Adidas is largely similar and hence they will be explained together and differences.8 percent share for Adidas. will be pointed out.In 1983. Both companies expect the country to be its second -largest market. Their main customers are athletes and sports enthusiasts but it doesn t limit there. There are 2. While every Olympics is a dogfight for the longtime rivals. as our research told us.S. "It's the ultimate land grab. market. They always ensure that the needs of various consumer groups are fulfilled by going into partnership with high -end designers and technology. and is going to take some dislodging. who 31 .

excellence. Nike has more top athletes. For the fashion conscious segment of the market. COMPETITORS NIKE is one of the most successful manufacturers of athletic footwear. they come in with their lifestyle products.000 athletes in the Adidas stable who will compete in Beijing. Nike has signed up 22 of China's 28 spor ts federations to outfit most of its athletes. So for many of 3. high performance. Nike stands for success. Retail stores are largely low key sellers for them. The principal decision makers in the process are the buyers themselves as they know best their specific need for their specific sport. fame etc. including the U. Gear and Adidas. an image which both these brands strive to uphold by high pricing and premier status.1 manufacturer and marketer of athletic footwear. compared to other markets. along with old standby basketball legends Kobe Bryant and LeBron James. The main problem they are trying to solve is the risk of injury and the possibility that an athlete might underperform due to low quality footwear. The frequency of buying is less. The deal is just one of 40 that Nike signed with various national federations. L. The unsatisfied need for most customers in this market is primarily high end footwear which helps them perform better in their chosen playing field. During play. The places where the consumers mostly buy are original outlets and franchises. donning the three stripes will be limited to the medal stand. as teams generally order a large number of performance footwear for all its players and individuals usually buy a single pair. there is always a risk element associated with their performance. The quantity bought differs for team and individual sports. as well as with manufacturers of casual footwear. competing with Reebok. But nike s athletes aren t guaranteed to win games. they'll be in Nike gear.A. ensuring that team members will be decked out in Nike gear during play regardless of where they have their individual endorsements. Germany and Russia. Buyers generally buy these products as durable long lasting products that they use specially for big game days.look to them as status symbols. while it's staked out its turf as an official sportswear partner. 32 . WAR BETWEEN NIKE AND ADIDAS The problem for Adidas is that. They include Swiss tennis ace Roger Federer and Australian track star Craig Mottram. but at a lower cost than what these brands offer.S. Nike is the world s No.

This merger is indeed a success which has achieved significant sales growth. Nike. y y y y y Ni e Red tape Bata Liberty Puma New balance y Nike Nike enjoys a 47% market share of the domestic footwear industry. Indonesia. with the majority of their output consisting solely of Nike products. with sales of $3. and is more cost efficient and beneficiary to both brands with Reebok s strong presence in US market and the global recognition of Adidas. ADIDAS The chief competitors of adidas are PUMA and Nike. Taiwan. and South Korea. using only subcontractors throughout the globe. These factories are 100% owned by subcontractors. and there are over 500.77 billion. 33 . Their majority of their output today is produced in factories in China. Merger of Adidas & Reebok complement each other in competing with their competitors. and Vietnam. Nike has been manufacturing throughout the Asian region for over twenty -five years. In August 2005.8 billion. the Philippines.y y y y y y y y Adidas Reebok Woodland Red tape Bata Liberty Puma New balance Nike is the official kit sponsor for the Indian cricket team for 5 years. They utilize an outsourcing strategy. US $ 43 million. the company announced that it had made a deal to acquire rival Reebok for $3. Nike beat Adidas and Puma by bidding highest.000 people today directly engaged in the production of their products. The acquisition would increase its market share and to establish a stronger foothold in the Sports Industry. but they also have factories in Italy.

and their factories are considered to be the worst in the industry. to an outsourcing focus today throughout Asia. from a vertical operation in Germany in the 60 s and 70 s. the income of the business is still heavily dependent upon its share of the footwear market. However. Single Brand Too many stars endorsement Contract manufacturing Spread portfolio of products Reliant on retailers Reduction of target market y y y y y y y Adidas Adidas is the main competitor for Nike. Adidas currently enjoying the fastest growth of any brand domestically. Nike is strong at research and development Nike is a global brand. It is just a matter of time before they are exposed. they need 34 . In order to avoid the negative effects and lost revenues that Nike and Reebok have received. with a market share of 6% and revenues of $500 million. they do not have a code of conduct. Product Range Capacity for innovation Distribution expertise Single Brand Stars endorsement Contract manufacturing Large portfolio of products Weaknesses of Nike y The organization does have a diversified range of sports products. They have adjusted their manufacturing strategy. Unlike the big two.Strengths of Nike y y y y y y y y y y y Nike is a very competitive organization Nike has no factories. This makes a very lean organization. The retail sector is very price sensitive. and are reaping the rewards substantially. Nike and Reebok. It is the number one sports brand in the World. with an underground swelling of negativity already occurring today. They have been shielded from bad publicity by the two Goliath s of the industry. It does not tie up cash in buildings and manufacturing workers. Nike does have its own retailer in Nike Town.

Strengths of Adidas y y y y y y y y Competitive pricing Good financial position Effective Marketing Strategy Market Leadership Strong online presence Strong brand Strong international operations Strong distribution chain Weaknesses of Adidas y y y y High cost structure Over pricing Low quality products/services Limited product line Reebok Reebok. as the second leading manufacturer of footwear. has domestic revenues of $1. This is a product where the "Made in the USA" label is crucial to its success.S. Similar to Nike. they also utilize a 100% outsourcing strategy and manufacture their products throughout Asia. is allowed to foster under this manufacturing strategy. but have less infrastructure than Nike across the globe to enforce it. However. the creation and distribution of a global brand. Converse manufactures their products both domestically and internationally. today. is the Chuck Taylor All Star. their strength. NC and Mission. and internalization is a source of co mpetitive advantage. These two 35 . with plants in Lumberton. as they focus on their core competencies. It is important to note that t he only product they continue to manufacture in the U. and outsource their production. TX. They have created and implemented their own code of conduct for manufactures to follow.to immediately begin to take a proactive stance in regards to the working conditions of their factories. Converse With a market share of 3% and revenues of $280 million.28 billion and a market share of 16%.

must also generate a higher degree of internal monitoring of their subcontractors. niche business. and closeness of factories is more essential to their customer base than the other companies because of special orders. of vertical integration and outsourcing.S. While Nike tries to bring in creative and out of the box technology favoring music and sports lovers Adidas brings in new products and expands the market that they are serving. COLLABORATORS Nike One of the oldest collaboration was in 1985 with Michal Jordan and had introduced Air Jordan . They compete to become the number one. revised and improved products to keep up their competition with each other. The basis for competition is to see who is better than the other and to win more consumers acceptance and to be the leading and most loved brand of consumers. with their strategic reasonin g based on the advantages gained through higher levels of quality domestically. or they will soon face increased scrutiny New Balance New Balance is the one company that has kept a substantial amount of manufacturing in the United States. Nike is the slightly over priced but yet the have their customer base. they are straying away from the skills that they do better than anybody else the design and marketing of the premier running shoe in the industry. calories and other information of the user. following the strategy of their competitors. Their latest innovation was Nike + ipod. They are in a highly specialized. While Nike is more accepted in U. Although there is something to be said for manufacturing domestically. and the "Made in the USA" label. They currently operate five plants in New England. and has a 3% market share with sales of $260 million. With this mixed strategy. Converse. allowing them to control this niche for the future. This year nike has collaborated with Nemo for Nike Boots and Buzz Adrin for Nike 36 . with the explanation of reduced wages driving this strategy. Adidas has a strong base in German and the European market. For their most technical products they employ outsourcing. like Adidas. Their long-term strategy should shift to a 100% outsourcing model. employing over 1400 workers. Adidas and Nike are like by many and they have a strong base of brand loyalty yet they compete with each other and they bring out new. They innovated shoes which had a chip in it which could detect and tell the time. All other shoe models are outsourced in Asia. they are very unique. running shoes.factors serving as the sole reason why the production remains within the U. that produces 50% of their output.S.

His personality. Adidas Consortium City Series 3 . Mia Hamm. independence and creativity are similar to the mindset of Nike s 6. University of Tennessee. Ali has an old association with adidas. McCartney and Adidas will co-host an exclusive soiree. and maverick who looked towards the next frontier.0 athletes who are pushing the boundaries of their respective sports.0. Advertising partner of adidas basketball shoes is 180LA agency. The celebrities are used by the company to increase their market value and for acceptance by the consumers as they have a urge to but those products that are endorsed or used by their favorite stars. Kalavinka and Yoppi for football shoes. Adidas Originals is hoping to be The Greatest through its new partnership with boxing legend Muhammad Ali.6. Kobe Bryant are oher collaborators for adidas. COMPANY CORE COMPETENCY A company s core competencies are those things that a company can do so as to be better than their competitors in the central areas of the company where the most value is added to your products. Incentives and motives of the collaborators are to join wi th the best and fast moving sports shoe which is used by many people around the world and is widely distributed and accepted by people. it gives sponsors to youth. 37 . Nike is also in collaboration with Black Coaches Association. Buzz Aldrin serves as an icon of exploration. Those collaborators get a opportunity and exposure. Tiger Woods. The partnership between Nike and Buzz Aldrin is based on a shared passion for performance innovation. Adidas has a new designer Stella McCartney who will be the company s official newest design collaborator and it would be called as Adidas by Stella McCartney . Nike and apple has announced a partnership targeting runners and music lovers and has launched Nike+ipod which has hit the market and is creating a trend it was one of the biggest success. Toronto s Livestock and Tokyo s VA. to provide scholarships. New York Yankees.Adidas Consortium city Series is back this time collaboration with Paris Colette London s Crooked Tongues. a space pioneer. Brazil Soccer are the celebrity collaborators of nike. and sports clinic to e nhance the opportunities for minorities in sports industry. Adidas originals has teamed up with Cheez. The collaboration will launch "Ali by Adidas .

Core Competencies of Adidas y y y y y y Technology Customer focus Brand recognition Supply chain Collaboratively competitive The company launches every six months between 600 and 800 new designs in footwear. are their marketing. lower wages. Hence they have the best people in their organisations and that. with incredible fervour and gusto. 38 . the most strategically viable manufacturing strategy is the outsourcing of their products. distribution. strongly outweigh all other manufacturing options. in the form of shifting of risk. They are both pioneers in this field and hire the best talent from the best universities across the world. Therefore. and technological expertise. The core skills that set nike and adidas apart from the competition. Both companies are huge conglomerates with an enviable turnover worldwide. coupled with their access to almost unlimited capital. reduced capital requirements. The efficiencies that are gained. and ability to focus on their core competencies. makes them potent forces. which they do. The following questions are always asked by the expertise to the company: y y y y Is internalization a source of competitive advantage? Is manufacturing a skill our firm does better than anybody else? Will firms be able to leverage their manufacturing expertise in the future? Are we releasing any of the firm s proprietary skills/information by outsourcing? The answer for both adidas and nike is NO. in today s global environment. Core Competencies of Nike y y y Technology Customer focus Strategic Outsourcing Strategic Outsourcing An advantage for Nike and Adidas over competitors Nike s core competency is strategic outsourcing. They have large media budgets and a large amount of money to throw around.

883 billion (2008) US$ 12.199 billion (2007) US$ 1.443 billion (2008) US$ 7.627 billion (2008) US$ 2. Currently. adidas has spread its target to all sportswear. and is meant to respond to the cushioning needs of a active feet. adiPRENE 39 . Name Description A neoprene-like material that feels somewhat like "nerf.5 billion (2008) $933 million) (2008) NIKE Revenue Operating income Net income Total assets Total equity US$ 18.ADIDAS Revenue Operating income Profit $15.825 billion (2008) CONTEXT TECHNOLOGY Adidas was originally intended to be a product line for soccer sportswear. adiPRENE is quite durable. however." it is most often used in the heel of a shoe.6 billion (2008) $1.

it is meant to provide natural rotation between the forefoot and the heel. y y y Speed of change of product Design Ability Speed of News reporting Name Nike Ground Description Nike Air is the most basic cushioning material used by Nike.Nike Air that is positioned in the heel of the shoe. ultimately allowing for better support in the midfoot.adiPRENE+ adiPRENE+ is similar to adiPRENE in that it is a neoprene -like material. Nike has integrated technology system to develop their product. but is visible 40 . y y Encapsulated Nike Air .Nike Air that is encapsulated within the heel of the shoe Visible Nike Air . Nike always adopted the latest technology for their product and innovated new products. but may not provide sufficient or proper cushioning for serious atheletes with ind ividual preferences. however it is primarily found in the forefoot of a shoe. It provides adequate cushioning for the casual wearer. it is made out of a polyurethane bladder filled with air. It is located in this region because it is designed to provide greater forefoot momentum at toe-off. Torsion Torsion is a stability technology located in the midsole of the shoe.

has a thickness of 8mm. but rather athletes who are larger in size. and even has somewhat of a "bounce-back" response when compressed. it often provides more than adequ ate cushioning. and need a more dependable and firm cushioning system. provid ing optimal cushioning Max Air A technique is used that forces air into a pre-formed shape. y y Double Stacked Zoom Air . meaning that the shoe puts the wearer at a higher distance off the ground. Inspite of its thin profile.two Zoom Air packs stacked on top of each other. Nike Shox is generally located in the heel of the shoe. It essentially is a thin bag of pressurized air that. Max Air is best suited for athletes who do not necessarily depend on quickness and speed. Because of this.Zoom Air packs located both in the forefoot and heel. y y Air Max 360 Air Max 180 Nike Shox Nike Shox is a cushioning system developed by Nike that is comprised of polyurethane-foam columns that provide cushioning in a way that keeps the foot parallel to the ground. Zoom air is often times preferred by athletes who rely on quickness and speed because the thin profile allows for better court/field feel because your center of gravity remains mostly unchanged. thus allowing for more pressurized gas to fit into a larger "bag. a benefit of this process is that the cushioning system provides great stability and impact protection. 41 ." Max air is generally not larger in size and visible. usually located in the heel Full Length Zoom Air .Zoom Air Zoom Air is among the more technologically advanced (and expensive) cushioning systems used by Nike. and your foot is located close to the ground. when inflated. but there are an increasing number of shoes that feature a full length shox -based system of cushioning.

Since 90-s even women consumers dominate the athletic field and changed the market. it is created from a single piece of molded material. When first worn. Remains the premier low profile traction. The tradition values and attitude is changing of the people using branded products is a status symbol. or between the lining and the outside.Foamposite A polyurethane-based material created by Nike that is both durable and lightweight. Children are becoming more brand conscious and opt for branded products. Because it is seamless. thus providing a tailored fit that feels quite natural Dynamic Innersleeve A seamless inner sleeve made of lycra that hugs the foot. and is meant Fit to take the place of the shoe tongue. Monkey Paw A thermoplstic urethane structure located either on the outside of the shoe. SOCIO CULTURAL ADIDAS y y y y y y Since 70-s. it is somewhat uncomfortable. customers are brand focused. Young generation believes more on advertisements and internet. It is primarily located around the ankle region and helps to prevent ankle sprains due to ankle inversion. second only to actual spikes. 42 . many prefer it because it reduces the chance of chafing and has a natural and comfortable feel to it. Waffle Sole Traction technology derived from rubber put on a hot waffle iron back in 1972. As the income has changed people shift from normal to branded ones. Sport consumers prefer fashion and style which is a value proposition of both nike and adidas. but over time. the material actually molds to the shape of your foot.

Contract manufacturing is chosen by many athletic shoes company. y y y y y y USA economic growth is in slow growth because of WTC. globally. savings. price. debt and credit savings. Puma for Adidas Competition is happened around the world. not locally Athletic shoe trend is going to be fashion -oriented 43 . Slow down in the economy Reduction in consumer confidence Barriers of entry to the EU Contract manufacturing COMPETITIVE FORCES y y y Competition is more tight with the coming of Reebok and Adidas for Nike and Nike.NIKE y Brand conscious consumers y Change in buying habits in younger people y Generation Y prefers other types of footwear y Increase in the female share of the market y Corporate social responsibility ECONOMIC The economy depends on the current income.

This is very true in the case of these two companies. Club América. from 2006 till end of 2010.SEGMENTATION. Adidas and Nike promise their customers comfort. style and performance. Celtic and PSV Eindhoven. Niche marketers aim to understand their customers needs so well that the customers are willing to pay a premium .Pura Cup. KFC Twenty20 Big Bash. Both the companies have lived up to their reputation in the world of sports shoes. POSITIONING Market Segmentation Both Adidas and Nike fall under niche marketing. Aston Villa. reliability. For the 2008 Summer Olympics in Beijing. TARGETING. ADIDAS Adidas are the main sponsors and kit sponsors of the successful Australian Cricket Team and the England Cricket Team. Ford Ranger One Day Cup and the Indian Premier League teams Delhi Daredevils and Mumbai Indians. Nike sponsors several of the world's top golf players. such as Manchester United. Porto. Their products are mainly aimed at both men and women looking for sports apparel. Trevor Immelman and Paul Casey. Juventus. They are also the main sponsors of the Indian cricketers Sachin Tendulkar and Virender Sehwag and English cricketers Kevin Pietersen and Ian Bell. NIKE Nike pays top athletes in many different sports to use their products and promote/advertise their technology and design. Nike is the official kit sponsor for the Indian cricket team for 5 years. 44 . including Tiger Woods. Arsenal. amid criticisms. They have a narrowly defined customer group seeking a distinctive mix of benefits. China. Shakhtar. Red Star. Nike beat Adidas and Puma by bidding highest. Adidas spent 70 million sponsoring the event. Adidas also sponsors events such as the London Marathon. FC Barcelona. But customers are willing to spend the extra money for the quality and service they receive. Adidas and Nike sports shoes are priced high. Steaua. Adidas are the main sponsors of Australian Domestic Cricket Competitions . Nike also sponsors some of the leading clubs in world football. Inter Milan.

quality construction and durability that rivals any other shoe. including the adiStar Control 5. the adiStar Ride (the replacement for the adiStar Cushion 6). They seek to help athletes of all skill levels achieve peak performance with every product they bring to market. These brands and a couple of others have gained the respect of thousands of beginner and professional sportsmen around the world. Adidas mainly focuses on men and women who are brand conscious or are looking for comfort and performance in the area of footwear. among them Adidas running shoes. In the lifestyle and apparel market targets consumers who identify with sport as a way of life and are brand conscious. Adidas wants to reach the pinnacle of success. the Supernova Sequence (the replacement for the Supernova Control 10). It has more than 200 varieties of men s footwear and more than 150 women footwear. The company officially became the No. Adidas has slowly crawled its way b ack up into the ranking of the top footwear manufacturers in the world. Some makes of athletic shoes have raced ahead of the pack in appreciation. Adidas constantly comes up with new technologies to help sportsmen improve their performance by providing comfortable shoes.SEGMENTS TARGETED Both Nike and Adidas target aspiring athletes in the age group of 15 -35. football. ADIDAS The unique Adidas Shoes compared with other sport shoes covers the largest market. It has got an entire line of shoes devoted to sports like basket ball. They are consumer focused and therefore continuously improve the quality. At present. tennis. In addition. among others. because o f great design. A major chunk of their customers include athletes who are looking for sports shoes which are customized according to their needs. golf and running. Running Adidas currently manufactures several running shoes. 1 driver in golf in 2005 and in 2008 Adidas made their first major move in cricket market. look. feel and image of the products and organizational structures to match and exceed consumer expectations and to provide them with the highest value. their performance apparel 45 . and the Supernova Cushion 7 (which will soon be replaced by the Supernova Glide). Customer satisfaction is the main motive of the company. Adidas also makes sports specific shoes.

He is still wearing Adidas shoes when he plays matches. Skateboarding Adidas SB (Skateboarding) is shoes made specifically for skateboarding. They are most famous for their iconic Superstar and Pro Model shoes. Cricket In the 1990s. Adidas signed the world No. Adidas even made action figures after Sachin Tendulkar. NIKE Nike has divided its customers into the following way y y y Women Men Girls  3-36 months  3-8 years  8-15 years y Boys  3-36 months  3-8 years  8-15 years 46 . Adidas also uses kangaroo leather to m ake their more expensive shoes. affectionately known as "shelltoes" for their stylized hard rubber toe box. 1 batsman Sachin Tendulkar and made shoes for him. Basketball Adidas has been a long time basketball shoe manufacturer and is one of the leading basketball brands in the world. Many of the shoes Adidas previously made were redesigned for skateboarding.is widely used by runners.

but Nike+ also lets yo u save your running data at nikeplus. longest distance and time.com. and a distance club where you can view everyone s running milestones. NIKE WITH APPLE The Nike+ package consists of a pair of specially designed Nike+ running shoes. You can challenge friends and strangers to compete with you by sharing your running data with them. The kit consists of a sensor that fits into a built-in pocket beneath the insole of your left shoe and a receiver that fits into the iPod nano dock connector. Even non-athletic types have four pair of sports shoes one for jogging. iPod tells you your time.0 features like user forums where you can meet and challenge other runners. a challenge gallery where you can view all user created challenges. or most calories burned. it s almost impossible to differentiate between a Nike. an iPod nano. ask questions. iPod also congratulates you when you ve reached a personal best your fastest pace. one for trekking. You can also choose a PowerSong that helps you run stronger and listen to it every time you need a boost. one for cross -training and one for tennis. if you take away the logos. pace.POD S AND POP S NIKE & ADIDAS In spite of all the technology that supposedly goes inside a typical sports shoe. 47 . In addition to progress reports. The Nike+ website also includes other web 2. This in itself is incredible. The sensor uses a sensitive accelerometer to measure your activity. Nike/ Reebok/ Adidas have instead focused on differentiating themselves by converting their brands into cultural currency. distance. and calories burned via voice feedback that adjusts music volume as it plays. So. As you run. so that you can set goals and track progress. a Reebok and an Adidas. and then wirelessly transfers this data to the receiver. and give feedback. and a Nike + iPod sport kit to connect the two.

Customers can choose their own colours and mascots to create shoes which define their personality. This strategy made the Adidas brand take on a different meaning. 48 . It has the largest international portfolio of sport ambassadors. The low -end products. ADIDAS Adidas shoes are cheaper than Nike. The Equipment sub brand would represent the best. It has a huge scope for growth and innovation. emotion and performance. whatever the product was. It has grown from a minor pla yer to the second biggest company in the industry. Adidas introduced a sub brand in 1990 to serve the high -end products for all categories of shoes and apparel. it still meant participation. This was a success strategy for Adidas.DESIGN YOUR OWN SHOES Nike allows customers to design their own shoes from a catalogue of predefined designs. for the normal consumer still have a high technology and level of innovation because of their inheritance of the older innovations and technology from the Equipment line.

however Nike has attained a considerable competitive advantage due to its reputation for quality and innovation. To differentiate themselves. Adidas had the same strategy within creating equity value to their brand. What differs in the endorsement strategies is that Adidas focuses in sponsoring teams and global events. while Nike have their centre of att ention on stars in specific sport like basketball and Michael Jordan or in golf and Tiger Woods. by doing it through the same media. gym etc. 49 . the only one you compete with is yourself whereas Nike communicates a provocative. As we can understand the two companies are aiming at nearly the same targeted customer group but with a slightly differentiation of attitude. The companies are benchmarking each other. and in advertising. using the techniques from each other s successes. They have a brand value and have established thems elves as style statements. The message from Adidas is. and Nike stands for a winning over everyone attitude. Both Adidas and Nike have used the same theoretical systems to create their brand building programs. Adidas chose a brand-building strategy that was built on the same theoretical criteria as Nike. but with a slight difference in communicated message. running. events like Adidas Streetball Challenge was created. aggressive winner attitude which can be related to the American sports attitude You don t win silver. both companies have about the same scale and scoop of advertising but they try to communicate different messages. Both Nike and Adidas promise their customers sports shoes which will provide them with comfort and durability. Nike launched their sub brand product Alpha line which was benchmarked on Adidas already launched sub brand of the Equipment product line for the elite of sports men. About advertising. We can find many similarities like endorsements strategies and the companies advertising strategies. Adidas stand for a competing and winning over your self-attitude. They challenged Nike in endorsement strategy. you lose gold .IN A NUTSHELL The brand image for both Nike and Adidas is immense. VALUE PROPOSITION Value proposition consists of the whole cluster of benefits the company promises to deliver to its customers. cricket. This differentiation is based on the differenc es in culture between the two companies and between Europe and USA. Nike and Adidas have a wide range of athletic footwear specialized for various sports like football.

Adidas.S. you lose gold . In order to achieve this aim. after a period of selling Onitsuka shoes from the back of their van at athletic meets. Nike would go on to grow out of the fusion of Bawerman's sporting innovation and Knight's marketing know -how. but after heated disagreements between BRS and Onitsuka. the company grew. and in that period Nike has gone from the brash newcomer. marketed by the then main player. In 1965. while Adidas has a lower price range offering almost the same benefits. and Nike stands for a winning over everyone attitude.However. BRS was basically the American distributor of Onitsuka training shoes. elegance and durability. Even at a very early stage it seemed that Knight had a far-reaching goal. aggressive winner attitude which can be related to the American sports attitude You don t win silver. It means being what you are and concentrating on what is important to you. and decided to call their new company Blue Ribbon Sports (BRS). Nike communicates a provocative. EVOLUTION AS A BRAND NIKE It was only 36 years ago that we had a world without Nike. Adidas stand for a competing and winning over your self-attitude. Bill Bowerman. legend has it that Knight and Bowerman each put in $550 to cement their partnership. The company went from strength to strength. the new boss at BRS decided to split fr om Tiger in 1971 and create their own 50 . to break the longestablished brand nomination of the U. Adidas represents passion. to the number one mass-market leader. The Nike story begins with the meeting of its co-founders at the University of Oregon. It was here that middledistance-running business student Phil Knight fell under the tutelage of the college athletics coach. POSITIONING The core of Nike s brand positioning is the Just Do It slogan. Nike offers customers more comfortable and durable athletic shoes at a higher price.

It was in this year that it managed to persuade the then little known Chicago Bulls basketball rookie Michael Jordan to endorse his own range of shoes. and thus Nike was born. and within a year company sales were at almost 2 million pairs. However it was in 1985 that Nike really became a major player. the newly created Nike Company was ready to hit the market with its shoes. Nike took off virtually instantly in the United States. In 1981 Nike decided to take another major step. In 2006. It was also at this that the fledgling company had to decide on a logo for the brand. and a logo to represent the brand was urgently needed. and another of the legends that the company managed to create for itself was developed. desperate to stay one step ahead of the competition.a position they retain to the present day. It was after the introduction of the Jordan shoes and mass -marketing that went with them that the "trainer wars" got underway. which are 5 times stronger th an steel and never lose strength. with the U.company manufacturing their own shoes. Each of the brands. becoming the company's first wholly owned foreign distributorship. Nike entered the cricket market with a 5-year sponsorship of the Indian cricket team for US$43m. deciding to honour the Greek goddess of victory. came up with a continu ous stream of developments and inventions of technical wizardry. For a while in the late 1980's Reebok actually overtook Nike to become the number one player (at least in terms of sales). In 2008. staying focused under Phil Knight's guidance. Nike and Apple released the Nike+iPod sports kit. Flywire is a new technology made up of thin wires of vectran fibers. The new Jordan endorsed range transported Nike and trainers in general to a completely new lever of popularity. enabli ng runners to log and monitor their runs via iTunes and the Nike+ website. an d regained the top spot in terms of market sales . Lunar Foam is a material developed by NASA that gives the shoe excellent shock absorption and a great feel with minimal weight. It is said that Jeff Johnson came with the idea for the new name. Phil Knight turned to an asso ciate from his teaching life and commissioned graphic-design 51 . and is going to take some dislodging. Nike introduced shoes featuring new Flywire and Lunarlite Foam materials. but Nike came back strongly with its 'just do it' slogan in 1988. Even Nike could not have imagined the effect that this single act would have on sales. Nike has continuously pushed back the boundaries of trainer design. DEVELOPING THE SWOOSH Back in 1971.K.

The envelope contained Nike Stock. honesty and commitment are derived from sport. In 1983. British football star David Beckham s relationship with Adidas has no doubt lent itself well to 52 . ADIDAS When Adidas entered the marketplace some 50 years ago." Historically. where revenue rose by 15 percent to US$ 878M last year. this sensibility was demonstrated through early and continued involvement with Olympic athletes. the story doesn't end there. Knight took Davidson out fo r lunch and presented her with a diamond -encrusted Nike ring. the brand has steadily regained market share over the past five years to become the world's number two athletic shoe company (behind Nike). "the brand values of the company authenticity. How did it go about repositioning to once again be among the coolest of kicks? Adidas claims that. Recent sports figures representing Adidas don t only score high marks in their game they also score high in their celebrity quotient. may be further propelled in Japan and Korea when those two nations host the World Cup this year an event which is expected to garner 2. Knight wanted a design that would represent movement. Davidson supplied Knight with a few designs one of which was the initial 'Swoosh' so well known today. but with deadlines to meet the Swoosh was chosen Even though Davidson was initially paid only $35 for her design.student Carolyn Davison to work with his new brand. and also an envelope. Knight was not particular enamoured with any of these designs. Adidas s rapid growth in Asia. as well as active sponsorship of major global sporting events like the World Cup.5M spectators and one billion TV viewers worldwide. the key to revitalized success seems to lie in the considerable endorsement deals Adidas has developed with world class athletes. its focus was to produce shoes crafted specifically for soccer and running. inspiration. The new millennium has since brought about an Adidas renaissance. However.

Adidas. which were seen as lifestyle and leisure activities. In July. Activities such as golf. inline skating and surfing have grown into significant categories. 'no-rules' sports such as snowboarding. Recently dubbed "Captain of England. Adidas & designer Stella McCartney announced their partnership. ClimaCool TM. exposure like this reflects in the numbers. events and leagues. In September. but also for its product line. Adidas generates close to 60 new foot -friendly designs each year. On January 2006. it continues to strike savvy deals that capitalize on the star power of young athletes and increase its visibility in the marketplace. The new technology added breathable materials to the shoe. to beat the limits. 53 ." Beckham led his team to victory in the 2000 FIFA World Cup. the Group completed its three-divisional structure for its sore brand. athletes. It refers to the shared attitude with the athletes. Increased product offerings in these categories have undoubtedly contributed to a better score for the brand. In 2002 Adidas footwear innovatio n. the new Group will benefit from a more competitive worldwide platform. By combining two of the most respected and well-known brands in the worldwide sporting goods industry. of always pushing yourself further.the brand s visibility in the UK. Eclectic. are now part of mainstream sports. Tactics have been revised in getting these products out for consumption. products have been repositioned in higher -end and sports specialty stores. made its debut. sales grew seven percent to US$ 2. introducing the Adidas by Stella McCartney collection. The Adidas credo is to regard shoes as feet. well-defined and complementary brand identities. individual. Adidas continues to prove itself as a brand built to last through a game plan of reinvention. With Europe as Adidas s largest market. As a result. To keep up with the competition. Adidas announced the acquisition of Reebok LTD. hiking and mountain biking. and positioned its third division as Adidas Sports Style .7 billion. It appears that team Adidas has honed its strategy to become a revitalized contender in today s competitive sporting goods market and is now duly recognized as the sneaker of yesterday and today. a wider range of products. Reinvention was the key. and a stronger presence across teams. resulting in a product with superior fit and performance capabilities. last year. In 2004 Impossible is nothing became the central message of a global campaign that Adidas launched. With the recent acquisition of a lifetime partnership with Orlando Magic's Tracy McGrady (basketball) and its heavy involvement with 2002 World Cup. not only for the Adidas s marketing strategy.

MARKETING MIX PRODUCT CORE NEEDS The fundamental level is the core benefit. a lasting sole and value for money is the basic AUGUMENTED PRODUCTS Augmented products are those that the marketer provides to their customers. Sturdy footwear with a comfortable body. BASIC PRODUCT This is the second level here the marketer has to convert the core needs into the basic product of the customer. the benefit here is to protect the foot and provide comfort. which exceeds their expectations. 54 .

basket ball.PRODUCT LINE WIDTH OF NIKE Footwear Accessories Sports wear T. PRODUCT LINE WIDTH OF ADIDAS Foot wear Foot ball Running Tennis Accessories Bags Eye gear Watches Sports wear Jackets Jerseys Scarves Sport Equipments Foot ball Basket ball Football pump Body Care Deo Shower gel Perfumes 55 . cycling.shirts Hoodies Track suits Track jackets Wind runner Tops Shorts Pants Sports Body care Equipment Basket ball Football Golf equipments Deo Football Running Cricket Basket ball Cycling Bags Backpacks Sunglasses Gloves PRODUCT DEPTH Nike has different shoes for different sports like for running on hard surface. smooth surface. cricket.

Astroturf. asphalt. COLLECTION OF FOOTWEAR Adipore. firm ground. Besides the overall design and compactness of the shoes have made it a favorite of many professional athletes around the world. hard ground. The features that are a part of every Nike sports shoe are as follows. multi surface and rugby. F50. Many models feature an air pocket in the shoe that reduces the w eight of the shoe and reduces pressure on the heels. Predator PRODUCT PROFILE NIKE Apart from delivering a pair of comfortable sports shoes Nike also provides a number of value-added features with its products. leisure wear.Basket ball Water bottles Mats Wrist band Padding Hats Socks Swimwear Pants & tights Tops Shorts Sweatshirts Tracksuits Dresses Shirts Skirts Cricket bats After shave PRODUCT DEPTH Under football sports shoes include -Soft ground. High Performance Sports Shoes: Nike has patented the Air system and has made it into a regular feature in most of its models. Classics. 56 . turf rugby. Clubs.

Comfort: Nike shoes are renowned all over the world for the comfort they provide. Attractively packaged. they provide a tremendous level of comfort to the wearer and reduce the strain to his feet while playing. Style: Nike s designs are considered to be the most stylish in the industry and beat all others as far as looks are concerned. PLACE CHANNEL LEVELS The producer and the final customer are part of every channel. To prove this point we draw the example of the authors of this marketing plan. Durability: People purchasing a pair of shoes at such a high price often feel that they have made an investment. All of us own a pair of Nike s and have been wearing them for well over two years a symbol of the durability of Nike shoes. Lightweight: This attribute is in line with the two described above. Add to this the Swoosh the most recognizable symbol in sports and you have a product that would give the user a definite sense of pride. light weight. Well padded and cushioned. stylish and great value for money. ADIDAS Adidas shoes are very comfortable. A lightweight shoe provides greater mobility and eases the pressure on the feet of the wearer. They would obviously want to see their shoes last a long time. Nike and adidas follows a one level channel or an indirect channel method where there is a manufacture who manufactures the goods and then they get it to the retail 57 . A zero level channel or a direct channel is one in which the produ ct reaches the customers hand directly from the manufacturer. it is a delight to bring a pair home. The soles are designed really well and give you great grip across all terrains. The shoes are very easy on the legs and they protect you from any kind of twists or sprains.

water bottles. apparel. additions and repositioning. While Nike has The use of a well known brand name to launch a new product. promote and sell the product to users. there are three types of product extensions revisions. The company s pricing depends on whether it uses mass merchandises or high quality boutiques. Push strategy uses the manufacturer s sales force. the 58 . of an unrelated category into the market is brand extension. In managing the intermediaries the firm must decide how many efforts to devote to push and pull strategy. Another extension is the different types of shoes that adidas has for football. money or other means to induce intermediaries to carry. bags and deodorants for both men and women. CHANNEL BREADTH The number of different entities that are involved for the same distribution function at different stages in a distribution channel. Nike has out sourced their production to South Asian countries like Taiwan China Indonesia and Korea who produces the goods and then sends them to the retailers. CHANNEL LENGTH The number of intermediaries that a product has to go through before it reaches the final consumer. There are no entities involved during any stages of the production or the distribution for both Nike and Adidas PRODUCT & BRAND EXTENTION The introduction of a product that is known to a company but which has features or dimensions which are new to consumers. There is only a single channel in between the manufacturer and the customer. trade promotion. Nike has extended its brand from sports shoes and sportswear it has launched a new range of watches. Adidas has also extended its brand to causal wears and toiletries for both men and women. CHANNEL MANAGEMENT PRACTICES The channel chosen affects all other marketing decisions. Both Nike and adidas has only one intermediary before the final good reaches the consumer from the manufacturer and it s the retailer.outlets and then it reaches to the customers. Bats are already a product for adidas but the launch of Adidas ST a new range of bats with the signature of Sachin Tendulkar is an example for product extension. bags and sports equipment. Pull strategy.

There are annual and bi annual discounts at the stores which attract better business than at normal business days. PRICING Basic Pricing Strategies The prices vary from depending upon the products offered. Nike and adidas use both push and pull strategy of channel marketing. Price: U$723 59 Y Ad da B T ha pu V U` XWV U . ese The MRP is also set by the company and the retailers make about 20 to 30% profit on the MRP for each sale. the consumers to demand the product from intermediaries. promotion and other forms of communication to persuade . Thebottom line is that both brands are priced on the upper end of the scale.manufacturer uses advertising. each one is different from the other and hence the pricing strategy is varied for each line. The prices are set by the company themselves and the dealers have no say in th matters. thus inducing the intermediaries to order it. Push strategy uses the resources of the company and they promote theproducts and with the help of pull strategy they persuade the consumers with the advertisements and other mediums so that they demand for the product before it is in the market for sale and continues the advertisements which persuades the consumers so tha the demand goes up and more t demand is created in the market. with market leader Nike being marginally higher priced than Adidas and still commanding a large market.

the endorsement focus strategy. To create brand awareness both companies have been usi endorsement ng strategies in their brand-building programs. Both Nike and Adidas are into a lot of sponsorships and advertising. development of Flagship stores.g. but real drivers were huge oversized billboards and murals on buildings that blanketed cities with messages featuring key Nike-sponsored athletes. Nike s advertising strategy was to create dominant presence in media. c b a 60 ef e d Nike Zoo Kobe MVP Sneakers . endorsement focus strategy. Nike centred their brand e uity model on the platforms. sponsorship programs focusing on major global events. TV ads linking Nike to a city were used. Adidas did not just spend moremoney they made an impact with brilliant executions. Jordan and T. and sub-brands. Woods and their success stories.Price : $10 000 g Co es in a Lucite bo signed b Kobe Bryant d PROMOTION Promotions are mainly focused on the consumer with prices at trade promotions increasing or decreasing with the context of the specific promotion drive. A didas took up the competition with Nike through raising their advertising budget to a level that made it possible to compete with Nike on the same conditions and the same strength as Nike did to capture the consumer interest. The Adidas strategies were based on. national teams and big sport events like the Olympic Games and different World Championship events. Nike created media presence in several trend setting United States cities. Mohammad Ali. not products. creating a dominant media presence. advertising. What differs is that Adidas focuses on sponsorship of teams and events e. sports associations. They made TV and other advertising campaigns. The company communicate their heritage of innovation. In contrast Nike has their focus on individuals like M. NikeT wn and sub o branding. This will help themto create awareness with help from different types of media. and teams. technology and big success stories with personalities like Emil Zatopek.

Nike was the first company to establish flagship stores and it turned out to be a sensation. In the finals in Germany it attracted 3200 players and 40.Adidas tried to spread meanings like We know then. Adidas made hereby a brand-building success. this event started out as a trail in Berlin in the beginning Chart-03: Adidas market Share comparison of the 1990s as one time occasion. first national. The success was obvious and after hard work and striving toward a top position in the industry Adidas was back in business. and then abroad.000 spectators. 61 . In the mid 1990s it had become a huge sport event with about 500. flag ship stores.000 participants all over the bigger cities in Europe. Examples of that is the Adidas Streetball Challenge a local three-person team basketball tournament. Nike s third strategy was to develop. Nike Town shops in bigger cities.we know now and There is nothing between you and success. Adidas choice was with which they made great success. so exceed your own expectations and limitations and Earn it .

Our survey consisted of people in the age group 15 -40. advertising and innovation on a scale of 10. but felt that Nike was overpriced. Most of them preferred Nike to Adidas. durability. however showed great brand loyalty to the brand. Those who preferred A didas. price. We asked them to rate attributes like quality. 12 10 8 6 Nike Adidas 4 2 0 Quality Durability Price Comfort Style Advertising Innovation Marketing Strategies Both Nike and Adidas are in the maturity stage of the product life cycle. style. Profits are stabilising and declining because of 62 . The market is basically experiencing a slowdown in sales growth because the products have achieved acceptance by their most potential buyers. comfort.ANALYSIS REPORT CUSTOMER SURVEY We conducted a customer survey to find out the customer preference and why people prefer a certain brand. The results that we obtained is graphically shown below.

in collaboration with Apple. Focus Nike and Adidas focus on aspiring athletes between the age of 15 -35. Nike trying to reiterate its high performance premium stand and Adidas trying to capture the market with lower prices. Differentiation Nike offers its consumers the option to customise their own shoes on its website. Nike is known for coming out with innovative products like Nike+. Nike traditionally sponsors teams and Adidas sponsors individual players. aptly represented by their slogan Impossible is Nothing .the hyper competition phenomenon explained earlier. Nike and Adidas are continuously coming out with new and cutting e dge technology 63 . Nike also has a large array of innovative product s. Adidas stands for competing and winning over yourself attitude. Both Nike and Adidas use celebrity and team endors ements as the base for marketing their products. They must keep innovating and achieve prof its through high volume and low cost. They give importance to comfort. Nike communicates a provocative and aggressive winner attitude with their Just Do It slogan. They also cater to the needs of people who consider in sport as a way of life and are willing to pay a premium for the brand value of the products. a huge differentiation that Adidas does not have. They offer discounts during strategic occasions and increase sales. CREATING VALUE Nike and Adidas provide customers the best goods in athletic footwear. Porter s Generic Strategies Overall cost leadership Nike has always been higher priced than Adidas and both of them use this difference against each other. The overall marketing strategy adopted by both firms is highly researched and successful. Both Nike and Adidas help athletes perform at the peak of their ability and this goal continues the drive the brands activities today. Both Nike and Adidas are taking full advantage of the newly expanding footwear market. including the Nike+. durability and value for money. Adidas on the other hand offers customers the same val ue but at a marginally lower cost.

Adidas s three stripes and the Nike s swoosh are among the world s top logos but the swoosh is dominant in most places. Both Nike and Adidas use celebrity and team endorsements as the base for marketing their products. They provide a brand value and have established themselves in the market of footwear industry and consumers are proud to be associated with them. Nike traditionally sponsors teams and Adidas sponsors individual players. the athletic footwear has been fast growing. both brands have been successful at retaining customers. Nike and Adidas are into extensive advertising campaigns which reflect their positioning in the minds of their customers. They have been largely successful with recovering the value generated as the market is mostly receptive to their innovative and advanced products. A product with a high degree of innovation also has a higher pricing. Adidas has higher brand loyalty among the two. Nike and Adidas have a variety of sports shoes which suit various needs of various customers. Adidas stands for competing and winning over yourself attitude. With the increase in awareness among people about the importance of wearing the right kind of shoes for a particular sport and the quantum leap in the buying power of c ustomers. Sustaining Value According to our survey. Considering the higher income of today s generation and the increa sing buying power of customers both Nike and Adidas have priced their products wisely. aptly represented by their slogan Impossible is Nothing . but Nike s cutting edge technology enables it to maintain its customer base. Their customers are willing to pay a higher price for their brand value and the benefits that their products offer. From basketball to gym shoes.which keep up with the needs of the customers. they cater to all needs in the athletic shoes industry. Nike communicates a provocative and aggressive winner attitude with their Just Do It slogan. 64 . The younger generation loves the brand value and are willing to pay a premium price for the products offered. Capturing Value Pricing philosophy The basic pricing philosophy of both brands is dependent upon the quality of the produ ct.

65 . They have priced their products with a huge margin that people are willing to pay because of the brand value associated with them. Adidas and Nike are competing with each other to gain the No. Nike is forever trying to bring out cuttin g edge technologies and innovative ideas to meet their customers growing needs. The increase in the buying power of the customers has also been fully utilised by both the brands. 1 position.Both Nike and Adidas are fully exploiting the growing footwear market.

adidasGroup.footwear-industry.adidasgroup. Abraham Koshy. Mithileshwar Jha 13th edition 66 .adidas. www. http://www.com/en/News/_downloads/pdfs/2009/Press_Release_Q42008_e. www.pdf .trap17.com/campaigns/orginalsss2009/content/#/lifestyle/full-length-film. BOOKS Marketing Management by Philip Kotler.nike. 4. 9.com 14. www.nike.com 16.wikipedia.com 1.echeat.com 10.com/historyofnike 12. www.nike.com/history 11. www. 8. 6.com www. www. www. 7.com/en/retrieved 7th june 2008 www.adidas. 5.com www.press.com/historyandtimeline 13. 3.champion. Kevin Lane Keller.scribd.uk/whatsnew.jdsports. 2. www.co.indianfootwearindustry.adidas.com 15.ie www.REFERNCES WEBSITES www.coolhunting.com www.aspx?id=5375 www.com 17. www.

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